Making a Lending Decision to a Party Residing in a Foreign

question 49

Multiple Choice

Making a lending decision to a party residing in a foreign country is a two-step decision.What are the two steps involved in such a decision?

• A)Assessing credit quality of the borrower and sovereign risk quality of the borrower's country.
• B)Assessing political economy risk and exogenous risks.
• C)Assessing sovereign risk quality of the borrower's country and other country risks.
• D)Rescheduling of existing loans and deciding on the terms for new loans.

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Definitions:

Agree

To accept or consent to a viewpoint or proposition shared by others.

Compliance Technique

Methods or strategies used to persuade someone to agree to a request or follow a command. These often involve psychological principles to influence behavior.

Lowball

A sales strategy where an item or service is initially offered at a lower than usual price to attract customers, who are then informed of additional costs or conditions that increase the overall price.

Milgram Studies

A series of psychological experiments conducted by Stanley Milgram in the 1960s to measure individuals' willingness to obey authority figures, even when instructed to perform actions conflicting with their personal conscience.